Lingjun Investment Restricted from Trading by Shanghai and Shenzhen Exchanges

The What does dealer mean?Shanghai and Shenzhen stock exchanges have initiated a public condemnation procedure against Ningbo Lingjun Investment Management Partnership (Limited Partnership) and imposed trading restrictions on it. The Shenzhen Stock Exchange pointed out that the company, on February 19th, placed a large number of orders through computer programs, causing a rapid decline in Shenzhen market stocks and disrupting market trading order.

The Shanghai Stock Exchange also announced that multiple products managed by Ningbo Lingjun sold a large number of Shanghai market stocks on the same day, causing a temporary plunge in the SSE Composite Index. Therefore, it has decided to implement regulatory measures to suspend trading of investor accounts related to its products. As one of the "Big Four Kings" in the domestic quantitative private placement sector, Lingjun Investment's managed assets have grown annually since exceeding 100 billion in 2018, despite facing significant performance setbacks recently. It is reported that several products under Lingjun Investment have seen a retracement exceeding 15% this year.

While Lingjun Investment faces trading restriction measures, many leading quantitative private placements are also experiencing significant performance pullbacks. Industry analysis indicates that the A-share market was unusual at the beginning of 2024, leading to substantial net value retracement in many quantitative funds. In response, well-known quantitative private placements like ZhoShi Private Fund, LongQi Technology, and Century Frontier Asset Management have all issued letters to investors, apologizing for the recent net value retracement of their products and stating that they will study related laws, regulations, and trading rules carefully, enhance compliance awareness, and ensure trading order. Some private placements have also tightened volatility constraints in their strategy models and strengthened risk control measures.

Facing industry challenges, the Shanghai and Shenzhen stock exchanges have issued an announcement on the "Steady Implementation of the Quantitative Trading Reporting System," indicating they will strengthen the regulation of quantitative trading, especially high-frequency trading, refine monitoring and analysis, and take multiple measures to increase regulation on quantitative trading. Although the quantitative industry still faces multiple challenges, some private funds believe that as policy expectations improve and market risks are gradually eliminated, trading volumes are expected to gradually recover, sentiment will gradually return to rationality, and they are optimistic about the future market.

In response to the trading restrictions and public condemnation by the Shanghai and Shenzhen stock exchanges, Lingjun Investment issued an apology announcement late at night, stating that the company will take this lesson to heart, strengthen compliance awareness, and maintain market trading order and protect investors' legal rights by improving the trading model and strictly controlling trading progress.

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